The 4 Ways to Grow Your Business
Step 2 – Increase the Number of Times Customers Come Back
Acquiring new customers is known as ‘front end’ marketing. Customer retention, or getting your current customers to come back to you, is known as ‘back end’ marketing. Increasing the number of times your customers buy from you is vital to the long-term health and profitability of your business.
Think about this: It can cost up to 6 times more to win a new customer than it does to have an existing customer purchase again. Why? Because you invested time and money to acquire that customer for the first sale, but every additional sale after that doesn’t involve any cost. So for every sale you make to a previous customer, you actually keep more as profit.
Increase Customer Return Rate – Classify Them
One of the first ways to ensure that the right customers keep coming back is to classify your customer base into tiers: A, B, C and D customers. A customers would be your best and most desired, the ones you WANT to work with because they are loyal, dependable, or just plain nice. B’s have the potential to become A’s with a little work. C’s are not ideal, and D customers are ones you’d just rather not deal with again.
This classification process means that your ongoing communication and marketing approach will be more appropriate for each group. For example, your A customers are the ones you most want to keep working with, so you might invite just them to join a preferred customer club, or A’s and B’s would get special mailings and offers, etc. You could even go so far as to ask your D customers to go elsewhere, freeing up more time and energy for your preferred customers.
Increase Customer Return Rate – Ask Them To!
Could it be that simple? Most businesses fail to recognize the profit potential in inviting past customers back. It really is as easy as that – assuming they were happy with you the first time. Once a customer is delighted with a product or service, they want to continue the relationship. Making them feel important and valued gives them the incentive to do that.
Remember that 68% of customers who leave you for your competitor do so because of the perceived indifference. In other words, they didn’t feel that you valued them or were concerned whether they bought from you or not. Not following up to say thank you and please come back, not making them special offers or sending them special mailings, not asking for input, can be perceived as indifference to them as individuals and as customers.
Increase Customer Return Rate – Provide Awesome Service
Another great way to keep customers coming back to you more often is to offer service that goes above and beyond the norm.
Creating a team commitment to service can impress your customer enough to keep them returning and referring others. The commitment could make certain promises of performance standards, and could explain your business ethics and mission. These can make great UCDs as well.
Awesome service, like good telephone technique and selling technique, can actually be systemized so all the team knows what they are expected to do for a customer and just how far their authority extends in bending the rules. You can’t stop at saying you want your customers to be given awesome service – you need to train the team so they can deliver it consistently and effectively.
Increase Customer Return Rate – Nurture Them
It’s important to nurture your relationships with your customer in the same way you would any other important relationship. Nurturing is the most cost effective way to make customers feel valued and motivated to keep purchasing from you. The more you stay in touch with them, the more likely they are to remember you.
Here are some ideas on how to nurture existing customers:
Send regular maiings to build on the relationship such as newsletters, offers, calendars, service reminders, thank you notes, special articles of interest, holiday cards, and so on
Establish a loyalty program that rewards frequent purchasers
Make follow-up phone calls to make sure they are 100% delighted with the product or service they received
So set up a system for ensuring that the relationship with your customers stays alive and encourages them to repeat purchase.
Increase Customer Return Rate – Use Customer Comment
Asking for feedback lets customers know that you are truly interested in them and their opinion – something other businesses just may not bother with. And the feedback you get can be extremely valuable for your strategic planning.
One way to do it is with follow-up calls just to make sure they are happy with their purchase or to get in with some damage control if they are not.
Another way is to use a satisfaction survey, although it’s sometimes difficult to get them returned, particularly if the customer is happy! You can also ask customers who submit positive comments to be a reference or provide a testimonial for you.
And customer advisory boards can be very useful too. You invite a group of frequent customers to come together and discuss a particular aspect of the service they received, what they valued, what could be improved, and so on.
When you do make the effort to gather feedback, and the customer has made the effort to give it to you, don’t waste it. Use the information to continually improve the way you do business, and let customers know that their suggestions are being used.